It’s a question I’ve been asking too (my miniscule portfolio is taking a beating in both equities and in precious metals). Mike “Mish” Shedlock offers some likely answers:
1. Fed Did Far Less than Expected
The Fed did not do what everyone thought, which is to say something far more than “Operation Twist”. [. . .] In short, the Fed did not print, or even threaten to print. Moreover the Fed committed to a strategy not through the end of this year, but all the way through June of 2012. Perhaps the Fed does more in the interim, perhaps not. [. . .]2. Mutual Fund Redemptions
Mutual fund cash levels are at or near record lows. In general, mutual funds were not prepared for the market selloff and sell orders came in. Rather than sell garbage like Bank of America at $6, mutual funds unloaded stuff like gold, taking profits.3. Margin Calls at Hedge Funds
Hedge funds unloaded gold and silver for the same reasons as mutual funds, but also because they mistimed the play and what Bernanke would do. Leverage works both ways.4. China Growth Story Fading
Commodities in general have been clobbered along with currencies of commodity producing countries because the global economy is slowing rapidly.
